Friday, April 19, 2024
BusinessCentral Bank to erect four branches outside Addis

Central Bank to erect four branches outside Addis

The National Bank of Ethiopia (NBE) is in the process of building branches in Wolayita Sodo, Bahir Dar, Hawassa and Dire Dawa. Designed to have six storeys each, the buildings will serve as issue branches for commercial banks operating in the four cities.

The regulator, which has only one branch outside the capital in Dire Dawa, has been planning to branch out for over a decade, though a little has been achieved thus far. The new branches will serve as issue branches, where branches of commercial banks are obliged to put cash beyond their transaction need.

Once completed, it will be a departure from the past as the Commercial Bank of Ethiopia has been acting as an issuer where the central bank of Ethiopia has no presence. In some towns, even private banks were tasked to dedicate their branch for the same purpose.

“The design was completed almost five years ago under the previous governor of the central bank, but the construction was not given enough attention under the new leadership since there were other concerning issues that needed to be settled first,” a senior official of the bank told The Reporter.

While the buildings are expected to sprawl on 12,000sqm of land, the central bank has already floated an international tender to hire contractors for the project. General and building contractors with a grade one license are eligible to apply until the end of November 25, 2021.

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The country’s biggest bank, CBE, welcomed the move of the central bank.

“It was not our mandate in the first place. We were designated as a trustee and we have been supporting the regulator with an understanding of its resource gap,” said Muluneh Aboye, Vice President for Credit Operations at CBE, whose outstanding deposit reached 735 billion Birr by the end of the last fiscal year.

The broad money supply, the currency in the economy, has reached 1.2 trillion Birr as of March 2021. Out of this, about 127 billion Birr is outside the banking system, according to the central bank.

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